Summary of key messages in keynote on auto industry trends
by Futurist Patrick Dixon
Car manufacturers are placing a huge number of bets on a wide range of new technologies ranging from auto batteries to hydrogen powered car engines, but only some of these will succeed.
Emerging markets will drive growth in automotive sales for the next three decades. If every nation had the same proportion of car drivers as the United States, we would have four times as many vehicles on the roads of the world as today.
Expect global car sales to exceed 107 million by 2020, up from 80 million in 2013. Car sales in China will grow from 19 million to around 31 million from 2013 to 2020, while car sales in Europe and Japan will remain relatively flat, with some recovery in the US. Expect auto manufacturing to become even more globalized with fewer major players. Take the UK, which produces more cars than at any point in the last 60 years, all made by foreign owned companies such as Tata group. Russia will be the largest car maker soon in Europe. Expect new car factories in Turkey, Indonesia, Africa, Brazil – as global manufacturers look to assemble vehicles close to or within regional markets.
Changes in auto manufacturing industry
Expect continued growth of robotics and robot assembly lines in the largest auto assembly factories. Expect growth of Mega Platforms – or standard base units for up to a million vehicles each, used as the main element in many different models – as in VW’s Mega Platform.
Expect big changes in auto manufacturing supply chains, with huge growth in regional trade, and reduction in global supply. China is already becoming an expensive place for manufacturing with wage increases of 11% a year. Expect auto manufacturing in Asia to switch to lower risk locations such as Vietnam or Indonesia.
Auto manufacturing in Mexico will grow over the next decade, as Mexico becomes more competitive in relation to Asia. This will be part of a wider reshoring trend, reversing years of outsourcing and offshoring in the early 2000s. A high percentage of components in such cars will be manufactured in America.
Future cars – designed for ultra-efficiency
Expect a revolution in design, aiming above all for fuel efficiency. For example, the 2015 Range Rover is 40% lighter than the older model. Expect wider use of plastics, carbon fibre and less steel. Expect 100% recycling to be fundamental to the design of all new vehicles. Expect 5-10% additional energy savings from coating all moving parts with a nanotech low-friction layer a few atoms thick.
Expect changes to every aspect of vehicle function. For example we will soon start to see laser headlights with 500 metre lighting distance (Audi, BMW), together with experiments using external airbags on the front of cars to protect pedestrians (Volvo, Mercedes Benz, BMW).
Expect to see 30-50% reduction in carbon emissions per kilometer in trucks with a wide range of innovations including more aerodynamic design, more efficient tyres, suspension which generates electrical power and so on.
Future cars – fuel of the future?
A huge unresolved question for auto manufacturers is what the fuel of the future will be? Expect emissions standards to go on rising rapidly, in America, Europe and other parts of the world, forcing the pace of innovation in petrol and diesel engines.
However the fastest and easiest way to reduce 80% of diesel pollution is for governments to ban all diesel vehicles that are more than 14 years old.
Expect more experiments with LPG – especially in the US with the collapse of gas prices following the shale gas revolution. India has already imposed LPG as a fuel in cities like Delhi where all taxis, autorickshaws and buses have already been converted, resulting in a major improvement in air quality. However, it will be very costly to develop LPG infrastructure across a large nation like America.
The same applies to hydrogen, which is a lighter and less efficient gas, providing less energy per kilogram of fuel. Hydrogen requires national distribution systems, and hydrogen tanks have to be even larger than with LPG. Despite this, expect to see more hydrogen cars from Toyota, Hyundai and Honda in particular. Honda has managed to make a hydrogen fuel cell which is 33% smaller, with 66% more output, in just 7 years.
Rapid growth of electric cars by 2020
Electric cars have a great future, despite a slow start with ongoing problems over battery capacity, weight and cost. Cumulative sales of pure e-vehicles and hybrids were still less than 225,000 in America up until June 2014, and targets set for example by Germany to have 1 million e-cars on the road by 2020 are very unlikely to be met. Manufacturing capacity is not the issue. Nissan alone has capacity at the Leaf factory to make 150,000 cars a year but is only selling 20,000. Most e-cars made before 2030 will be hybrids, delivering less than 25 grams of CO2 per kilometer. VW’s latest hybrid has already met this target.
Tesla is a company to watch – maker of the world’s most desirable e-sports cars, with astonishing acceleration and range of up to 200 miles. Tesla sees itself as a battery manufacturer and software company.
Of course, there is a big question about how green electric cars are – and it all depends on the source of electricity. In France, every e-car is nuclear powered because 70% of national power generation is nuclear – so a typical e-car will emit (indirectly) 8 grams of CO2 per kilometer, compared to 120 grams in India where such miles will be powered mainly by coal.
How car design will change – and limits on design
External body design for cars will hardly change over the next 30 years, compard to the last 30 because of fundamental limitations imposed by the physics of wind, as seen in wind tunnels. Thus all vehicles of a certain purpose and size will tend to be a very similar shape.
And the interior of cars are likely to be very similar in shape too – because there are only so many ways to pack a large number of comfortable and safe seats into a very small box on wheels.
Cockpits will go on getting more cluttered by dials and displays until manufacturers abandon them altogether for heads up displays projected onto windscreens – safer and simpler.
Smarter cars and self-driving vehicles / robots
Cars will become rapidly more intelligent and all new cars in many parts of the world will be permanently online from 2017 – in some nations earlier than that. Cars makers already providing auto parking (eg Honda, Audi, Volvo, Ford), assistance in keeping safe distance on motorways, auto braking, and a host of other features.
Expect future passenger vehicles to detect regular driving habits, routes, radio stations and so on, making choices before the driver enters the vehicle.
Expect vehicles to detect drowsy, drunk, distracted or dead (!) drivers. Alcohol sensors in gear handles, sensors to detect erratic driving, LED sensors to detect head movements or drivers not looking at the road ahead, detection of heart problems (ECG) from hands on steering wheel and so on.
Manufacturers will continue to launch a bewildering array of auto Apps such as Chevrolet’s MyLink with Glimpse, Iheart etc; Volvo SensoConnect. These will all be designed with one aim in mind which is to capture the driver relationship. On the other hand, Google, Apple and others will work hard to convince motorists that cars are just boxes and it is their own intelligence that makes vehicles “cool”.
Telematics is already altering the way that insurers charge customers – with special policies for younger drivers with costs that alter according to how safely they drive.
Vehicle to Vehicle (VtoV) communications will be standard on most vehicles by 2022, enabling vehicle trains to motor together down highways, nose to tail, saving up to 30% of fuel, as well as providing up to the second traffic information, and ability to anticipate and avoid accidents.
Robot driven cars will continue to attact great media attention. By early 2015, Google will have driven more than 1 million kilometres using their own robot drivers. The biggest issue is no longer just safety, but legal liability. Who sues who in an accident? This needs to be settled urgently. In the meantime, surveys show that drivers in emerging nations are far less worried about the safety issues than those in America or Europe, far more willing to trust the technology.
Who will own the vehicle and customer relationship?
A fundamental issue in all these innovations is this: who will own the driver relationship? Manufacturers are deeply worried that they will be swept aside by companies like Google or Apple. They are fighting back with a comprehensive array of integrated technologies. For example, auto sensing when a component is close to failing, with immediate alerts to one of their own dealers. Manufacturers would ideally like to lock out smaller independent garages, local breakdown services and so on.
Patterns of ownership are also changing. Numbers of 18-30 year olds who own their own cars has fallen in both America and Europe over the last decade. This not just related to the economic downturn and the fact that more of them are living at home with parents. In a smartphone world, it is more fashionable to pick up a local rental car by the hour, using your smartphone for instant booking and as an electronic car key. Leasing will also grow.
Used car sales and the future of Auto Auctions
And in all this, patterns of second hand car sales will also change. The dominant sales method of auto auctions in America will continue, with changes in how those auctions are conducted. More bids will be placed online, and over the years, more auctions will happen without any dealers physically present. Radical change will depend on trust in the accuracy of independent vehicle reports.
by Futurist Patrick Dixon, summary of key messages in keynote on auto industry trends for event held by the National Auto Auctions Association (NAAA).
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Categories: Leadership in Automotive
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